Dacian Gold reaches commercial production at Mt Morgans

Dacian Gold (ASX:DCN) has declared commercial production at its Mt Morgans gold mine on January 1st, following an excellent Q4 result wherein the mine produced almost 38,000 ounces of gold, which is a 30% increase compared to the previous quarter.

The higher production rate appears to be in line with the company’s expectation to progressively increase its production rates throughout 2019, which should ultimately result in strong revenue and cash flow numbers. As the Australian Dollar remains relatively weak, Dacian’s exposure to Australia-based operations should provide a nice boost to its financial results. As of the end of 2018, the company had in excess of A$85M in cash and physical gold on its balance sheet, and these amounts should only continue to increase throughout the current year. Dacian recently increased its resource estimate to 3.5 million ounces, of which almost 1.4 million ounces are considered to be reserves so Dacian’s target to produce 200,000 ounces of gold per year appears to be reasonable.